ex10-1.htm


     

    Exhibit
10.1

     

    
      


      


      


      


      


      


      


      


      


      


      AMENDED
AND RESTATED

       

      FLAGSTONE
REINSURANCE HOLDINGS LIMITED

       

      PERFORMANCE
SHARE UNIT PLAN

       

      


      


       

       

      


      16th May,
2008

       

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      
        Flagstone
Reinsurance Holdings Limited

        Performance
Share Unit Plan

        


        
          	
                  1.

                	
                  PURPOSE

                


        

         

        
          	
                   
      

                	
                  The
      purpose of this Plan is to advance the interests of the Company and its
      shareholders by providing PSUs as incentive compensation to certain key
      Employees of the Company and its subsidiaries, as well as, at the discretion of the
      Compensation Committee, employees of companies that provide operational
      support or other services to the
Company.

                


        

         

        
          	
                  2.

                	
                  DEFINITIONS

                


        

         

        
          	
                   
      

                	
                  2.1

                	
                  “Adverse Change in the
      Plan” is defined in paragraph
12.

                


        

         

        
          	
                   
      

                	
                  2.2

                	
                  “Board” means
      the Board of Directors of the
Company.

                


        

         

        
          	
                   
      

                	
                  2.3

                	
                  “Change in
      Control” is defined in paragraph
9.

                


        

         

        
          	
                   
      

                	
                  2.4

                	
                  “Common Shares”
      shall mean common shares of the
Company.

                


        

         

        
          	
                   
      

                	
                  2.5

                	
                  “Company” means
      Flagstone Reinsurance Holdings
Limited.

                


        

         

        
          	
                   
      

                	
                  2.6

                	
                  “Compensation
      Committee” means the Compensation Committee of the
      Board.

                


        

         

        
          	
                   
      

                	
                  2.7

                	
                  “Constructive
      Termination” is defined in paragraph
11.

                


        

         

        
          	
                   
      

                	
                  2.8

                	
                  “Employee” means any person, including
      officers, employed by the Company or any Subsidiary of the Company. Such
      term shall also include directors of the Company or any Subsidiary of the
      Company.  Such term shall also include, at the discretion of the
      Compensation Committee, employees of companies that provide operational
      support or other services to the Company.  A person shall not
      cease to be an Employee in the case of (i) any leave of absence approved
      by the Company or (ii) transfers between locations of the Company or
      between the Company, any Subsidiary or any
      successor.  Notwithstanding anything else contained herein, Mark
      Byrne shall not be considered an Employee for purposes of the
      Plan.

                


        

         

        
          	
                   
      

                	
                  2.9

                	
                  “Exchange
      Act” means the U.S.
      Securities Exchange Act of 1934, as
  amended.

                


        

         

        
          	
                   
      

                	
                  2.10

                	
                  “Hostile
      Takeover Termination”
      is defined in paragraph 13.

                


        

         

        
          	
                   
      

                	
                  2.11

                	
                  “Inter
      Vivos Designee” means any person or body of persons corporate or
      unincorporate, association, trust, partnership or similar entity or
      arrangement designated by an Employee to hold such PSUs granted to the
      Employee under the Plan and receive payments under the Plan during the
      life of the Employee.

                


        

         

        
          	
                   
      

                	
                  2.12

                	
                  “Maximum
      Award” shall mean the
      maximum number of Common Shares that an Employee would be entitled to
      receive if all of the performance goals set forth in a particular PSU were
      satisfied over the Performance Period(s) set forth in such
      PSU.

                


        

         

         

        
          
            
            

          

          
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                  2.13

                	
                  “Performance
      Period(s)” means the period(s) during which an employee must
      perform pursuant to the grant of a PSU; provided, however, that any such
      period must end on December 31 of the relevant fiscal
  year.

                


        

         

        
          	
                   
      

                	
                  2.14

                	
                  “Plan” means
      this Flagstone Reinsurance Holdings Limited Performance Share Unit
      Plan.

                


        

         

        
          	
                   
      

                	
                  2.15

                	
                  “PSU” means a
      Performance Share Unit.

                


        

         

        
          	
                   
      

                	
                  2.16

                	
                  “Subsidiary”, as
      used herein, has the meaning assigned to the term “subsidiary company” in
      the Companies Act, 1981 of Bermuda.

                


        

         

        
          	
                   
      

                	
                  2.17

                	
                  “Termination Without
      Cause” is defined in paragraph
10.

                


        

         

        
          	
                  3

                	
                  ADMINISTRATION OF THE
  PLAN

                


        

         

        
          	
                   
      

                	
                  3.1

                	
                  Administration.
      The Plan shall be administered by the Compensation
      Committee.   No member of the Compensation Committee shall
      be an Employee of the Company eligible to receive PSUs under the Plan or
      shall have been eligible within one year prior to his appointment to
      receive PSUs under the Plan or to receive awards under any other plan of
      the Company or any of its subsidiaries under which participants are
      entitled to acquire shares, share options or share appreciation rights of
      the Company or any of its
subsidiaries.

                


        

         

        
          	
                   
      

                	
                  3.2

                	
                  Powers
      of the Administrator.  The Compensation Committee shall
      have exclusive authority to select the Employees to be granted PSUs, to
      determine the number of PSUs to be granted and the terms (including the
      performance goals and Performance Period(s)) of such PSUs and to prescribe
      the form of the instruments embodying such PSUs.  The
      Compensation Committee shall be authorized to interpret the Plan and the
      PSUs granted under the Plan, to establish, amend and rescind any rules and
      regulations relating to the Plan and to make any other determinations
      which it believes necessary or advisable for the administration of the
      Plan.  The Compensation Committee may correct any defect or
      supply any omission or reconcile any inconsistency in the Plan or in any
      PSU grant instrument in the manner and to the extent the Compensation
      Committee deems desirable to carry it into effect.  Any decision
      of the Compensation Committee in the administration of the Plan, as
      described herein, shall be final and conclusive.  The
      Compensation Committee may act only by a majority of its members in
      office, except that the members thereof may authorize any one or more of
      their number or any officer of the Company to execute and deliver
      documents on behalf of the Compensation Committee.  No member of
      the Company shall be liable for anything done, or for any failure to act,
      by him or by any other member of the Compensation Committee in connection
      with the Plan, except for his own willful misconduct or as expressly
      provided by statute.

                


        

         

        
          	
                   
      

                	
                  3.3

                	
                  Eligibility.  PSUs may be
      granted only to Employees, excluding Employees whose employment contracts
      specify that they are not entitled to receive
  PSUs.

                


        

         

         

        
          
            
            

          

          
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                  4

                	
                  AWARDS

                


        

         

        
          	
                   
      

                	
                  4.1

                	
                  Type of Awards Under the
      Plan.  Awards under the Plan shall be limited to
      PSUs.

                


        

         

        
          	
                   
      

                	
                  4.2

                	
                  Maximum Number PSUs and Maximum
      Number of Common Shares that may be Issued Pursuant to PSUs Under the
      Plan.  The maximum number of PSUs that may be granted
      under the Plan shall not exceed 5,600,000 PSUs.  The maximum
      number of PSUs that may be granted under the Plan to any one Employee
      shall be half the maximum number of PSUs that may be granted under the
      Plan to all Employees.  The aggregate Maximum Awards that shall
      be issuable under the Plan shall not exceed 11,200,000 Common
      Shares.  If a PSU
      is forfeited or otherwise cancelled, or if an Employee does not achieve
      the Maximum Award pursuant to a PSU, the Common Shares underlying such PSU
      shall become available for future grant under PSUs pursuant the Plan
      (unless the Plan has
terminated).

                


        

         

        
          	
                  5

                	
                  RIGHTS WITH RESPECT TO
  PSUs

                


        

         

        An Employee
to whom PSUs are granted (and any person succeeding to such employee's rights
pursuant to the Plan) shall have no rights as a shareholder with respect to any
Common Shares issuable pursuant thereto until such Employee's name is entered
into the Register of Members of the Company and until the date of the issuance
of a share certificate (whether or not delivered) therefor.  Except as
provided in paragraph 14, no adjustment shall be made for dividends,
distributions or other rights (whether ordinary or extraordinary, and whether in
cash, securities or other property) the record date for which is prior to the
date such share certificate is issued.

         

        
          	
                  6

                	
                  PSUs

                


        

         

        The grant of
PSUs to an Employee will entitle him to receive, without payment to the Company,
all or a portion of the Maximum Award, as determined by the Compensation
Committee, if the terms and conditions specified herein and in the PSU are
satisfied.  Payment in respect of a PSU shall be made as provided in
subparagraph 6.6.  Each grant of PSUs shall be subject to the
following terms and conditions:

         

        
          	
                   
      

                	
                  6.1

                	
                  The
      Compensation Committee shall determine the number of PSUs to be granted to
      each Employee.  PSUs may be issued in different classes or
      series having different terms and
conditions.

                


        

         

        
          	
                   
      

                	
                  6.2

                	
                  Subject
      to subparagraph 6.6, at the end of the Performance Period(s) specified in
      the grant of a PSU, an Employee shall be entitled to receive the Maximum
      Award if the performance objectives set forth in the grant of such PSU are
      attained in full.  If the performance objectives specified in
      the grant are attained in part but not in full, the Compensation
      Committee, in its sole discretion, shall determine the percentage of the
      Maximum Award, if any, to which the Employee is entitled under the
      PSU.

                


        

         

         

        
          
            
            

          

          
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                  6.3

                	
                  PSUs
      shall be cancelled if the Employee's continuous employment with the
      Company or any of its subsidiaries or with any company that provides operational
      support or other services to the Company shall terminate for any
      reason prior to the end of the Performance Period(s), unless such
      termination results in Related Employment (as defined in paragraph 8), and
      except as otherwise specified in this subparagraph 6.3 or in subparagraphs
      6.4 or 6.5.  Notwithstanding the foregoing and without regard to
      subparagraph 6.2:

                


        

         

        
          	
                   
      

                	
                  6.3.1

                	
                  if an
      Employee shall, while employed by the Company or any of its subsidiaries
      or by any company that
      provides operational support or other services to the Company or
      while engaged in Related Employment, die or become disabled (within the
      meaning of paragraph 7) prior to the end of the Performance Period(s), the
      PSUs granted to such Employee shall be cancelled at the end of the next
      ending Performance Period and he, or his legal representative, as the case
      may be, shall become entitled to receive a cash payment (determined in
      accordance with subparagraph 6.6) in respect of the Common Shares he would
      have received had he been in continuous employment with the Company
      through the end of such Performance Period and had the performance
      objectives, if any, that were imposed been achieved;
  or

                


        

         

        
          	
                   
      

                	
                  6.3.2

                	
                  if an
      Employee shall retire under an approved retirement program of the Company
      or a Subsidiary (or such other plan as may be approved by the Compensation
      Committee, in its sole discretion, for this purpose) prior to the end of
      the Performance Period(s), then:

                


        

         

        
          	
                   
      

                	
                  6.3.2.1

                	
                  if at
      the time of his retirement the Employee is 65 years old or older, the PSUs
      shall be cancelled at the end of the next ending Performance Period, and
      he shall become entitled to receive a cash payment (determined in
      accordance with subparagraph 6.6) in respect of the Common Shares he would
      have received had he been in continuous employment with the Company
      through the end of the Performance Period and had the performance
      objectives, if any, that were imposed been
  achieved,

                


        

         

        
          	
                   
      

                	
                  6.3.2.2

                	
                  if at
      the time of his retirement the Employee is less than 65 years old and his
      retirement occurs before 24 months have elapsed since the grant of the
      PSUs, the PSUs shall be cancelled and the Employee shall become entitled
      to receive a cash payment (determined in accordance with subparagraph 6.6)
      in respect one-ninth of the Common Shares he would have received had he
      been in continuous employment with the Company through the end of the next
      ending Performance Period and had the performance objectives, if any, that
      were imposed been achieved, or

                


        

         

        
          	
                   
      

                	
                  6.3.2.3

                	
                  if at
      the time of his retirement the Employee is less than 65 years old and his
      retirement occurs after 24 months or more have elapsed since the grant of
      the PSUs, the PSUs shall be cancelled and the Employee shall become
      entitled to receive a cash payment (determined in accordance with
      subparagraph 6.6) in respect two-ninths of the Common Shares he would have
      received had he been in continuous employment with the Company through the
      end of the next ending Performance Period and had the performance
      objectives, if any, that were imposed been
  achieved.

                


        

         

         

        
          
            
            

          

          
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                  6.4

                	
                  If
      within 24 months after a Change in Control of the Company as defined in
      paragraph 9 and prior to the end of a Performance
  Period:

                


        

         

        
          	
                   
      

                	
                  6.4.1

                	
                  there
      is a Termination Without Cause, as defined in paragraph 10, of the
      employment of an Employee;

                


        

         

        
          	
                   
      

                	
                  6.4.2

                	
                  there
      is a Constructive Termination, as defined in paragraph 11, of the
      employment of an Employee; or

                


        

         

        
          	
                   
      

                	
                  6.4.3

                	
                  there
      occurs an Adverse Change in the Plan, as defined in paragraph 12, in
      respect of an Employee, then:

                


        

         

        
          	
                   
      

                	
                  6.4.3.1

                	
                  the
      Employee shall become entitled to
receive:

                


        

         

        
          	
                   
      

                	
                  6.4.3.1.1

                	
                  The
      Maximum Award multiplied by a fraction the numerator of which is the
      number of full months which have elapsed since the date of the PSU grant
      to the end of the first month in which occurs one of the events described
      in clauses 6.4.1, 6.4.2 or 6.4.3and the denominator of which is the total
      number of months in the Performance Period(s),
  plus

                


        

         

        
          	
                   
      

                	
                  6.4.3.1.2

                	
                  If the
      number of Common Shares determined pursuant to subclause (1) above is less
      than the Maximum Award (such difference being referred to herein as the
      “Deficiency”), the Employee shall receive Common Shares equal to all or a
      portion of such Deficiency as
follows:

                


        

         

        
          	
                   
      

                	
                  6.4.3.1.2.1

                	
                  if the
      Compensation Committee shall have determined, prior to the Change in
      Control and based on the most recent performance status reports, that the
      performance objectives for the particular grant were being met at the date
      of the determination, the Employee shall receive Common Shares equal to
      the full Deficiency, and

                


        

         

        
          	
                   
      

                	
                  6.4.3.1.2.2

                	
                  if the
      determination of the Compensation Committee was that the performance
      objectives for the particular grant were not being met at the date of such
      determination, the Compensation Committee shall at the time of such
      determination have also made a determination as to the percentage of the
      Deficiency as to which the Employee is entitled to receive Common Shares,
      but in no event shall such percentage be less than fifty percent
      (50%).

                


        

         

        
          	
                   
      

                	
                  6.4.3.2

                	
                  Payment
      of any amount in respect of PSUs as described above in this subparagraph
      6.4 shall be made as promptly as possible after the occurrence of one of
      the events described in clauses 6.4.1 through
  6.4.3.

                


        

         

         

        
          
            
            

          

          
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                  6.5

                	
                  Notwithstanding
      any other provision in the Plan, in the event of a Hostile Takeover
      Termination, the Employee shall immediately become entitled to the Maximum
      Award with respect to all PSUs granted to such Employee.  Such
      Maximum Award shall be payable, in the sole discretion of the Compensation
      Committee, either by issuance of Common Shares or in cash based on the
      market price per Common Share as of the close of trading on the date of a
      Hostile Takeover Termination.

                


        

         

        
          	
                   
      

                	
                  6.6

                	
                  Payment
      of any amount due to an Employee in respect of the PSUs shall be made by
      the Company as promptly as practicable or shall be deferred to such other
      time or times as the Compensation Committee shall determine, and may be
      made in cash, by issuance of Common Shares, or partly in cash and partly
      by issuance of Common Shares as determined by the Compensation
      Committee.  The amount of cash, if any, to be paid in lieu of
      issuance of Common Shares shall be determined based on the market price
      per Common Share as of the close of trading on the date on which an
      Employee becomes entitled to payment, whether or not such payment is
      deferred.  Such deferred payments may be made by undertaking to
      pay cash in the future, together with such additional amounts as may
      accrue thereon until the date or dates of payment, as determined by the
      Compensation Committee in its sole discretion.  In the case of
      issuance of Common Shares to an Employee, such Employee's services
      rendered to the Company shall be deemed to constitute full payment to the
      Company of the par value of such Common
Shares.

                


        

         

        
          	
                  7

                	
                  DISABILITY

                


        

         

        For the
purposes of this Plan, an Employee shall be deemed to be disabled if the
Compensation Committee shall determine that the physical or mental condition of
the Employee is such as would entitle him to payment of monthly disability
benefits under any disability plan of the Company or a Subsidiary in which he is
a participant.

         

        
          	
                  8

                	
                  RELATED
  EMPLOYMENT

                


        

         

        For the
purposes of this Plan, Related Employment shall mean the employment of an
Employee by an employer which is neither the Company nor a Subsidiary provided:
(i) such employment is undertaken by the individual and continued at the request
of the Company or a Subsidiary; (ii) immediately prior to undertaking such
employment, the individual was an officer or employee of the Company or a
Subsidiary, or was engaged in Related Employment as herein defined; and (iii)
such employment is recognized by the Compensation Committee, in its sole
discretion, as Related Employment for the purposes of this paragraph
8.  The death or disability of an individual during a period of
Related Employment as herein defined shall be treated, for purposes of this
Plan, as if the death or onset of disability had occurred while the individual
was an officer or employee of the Company.

         

        
          	
                  9

                	
                  CHANGE IN
CONTROL

                


        

         

        For purposes
of this Plan, a “Change in Control of the Company” shall occur if:

         

        
          	
                   
      

                	
                  9.1

                	
                  Any
      person or group (within the meaning of Section 13(d) and 14(d)(2) of the
      Exchange Act), excluding the initial subscribers to the Company, becomes
      the beneficial owner (within the meaning of Rule 13d-3 under the Exchange
      Act) of fifty percent (50%) or more of the Company’s then outstanding
      shares; or

                


        

         

         

        
          
            
            

          

          
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                  9.2

                	
                  the
      business of the Company for which the participant’s services are
      principally performed is disposed of by the Company pursuant to a sale or
      other disposition of all or substantially all of the business or business
      related assets of the Company (including shares of a Subsidiary of the
      Company).

                


        

         

        
          	
                  10

                	
                  TERMINATION WITHOUT
  CAUSE

                


        

         

        For purposes
of this Plan, “Termination Without Cause” shall mean a termination of the
Employee's employment with the Company or a Subsidiary by the Company or the
Subsidiary other than for (i) disability as described in paragraph 7 or (ii)
Cause.  “Cause” shall mean (a) a material breach by the Employee of
any contract between the Employee and the Company or a Subsidiary; (b) the
willful and continued failure or refusal by the Employee to perform any duties
reasonably required by the Company or a Subsidiary, after notification by the
Company or the Subsidiary of such failure or refusal, and failing to correct
such behaviour within 20 days of such notification; (c) commission by the
Employee of a criminal offence or other offence of moral turpitude; (d)
perpetration by the Employee of a dishonest act or common law fraud against the
Company or a Subsidiary or a client of either; or (e) the Employee willfully
engaging in misconduct which is materially injurious to the Company or a
Subsidiary, including without limitation, the disclosure of any trade secrets,
financial models, or computer software to persons outside the Company or a
Subsidiary without the consent of the Company or a
Subsidiary.  Notwithstanding anything herein to the contrary, if the
Employee's employment with the Company or a Subsidiary shall terminate due to a
Change in Control of the Company as described in paragraph 9, where the
purchaser, as described in such paragraph, formally assumes the Company’s
obligations under this Plan or places the Employee in a similar or like plan
with no diminution of the value of the grants, such termination shall not be
deemed to be a “Termination Without Cause.”

         

        
          	
                  11

                	
                  CONSTRUCTIVE
  TERMINATION

                


        

         

        For purposes
of this plan, a “Constructive Termination” shall mean a termination of
employment with the Company or a Subsidiary at the initiative of the Employee
that the Employee declares by prior written notice delivered to the Secretary of
the Company to be a Constructive Termination by the Company or a Subsidiary and
which follows (a) a material decrease in his salary or (b) a material diminution
in the authority, duties or responsibilities of his position with the result
that the Employee makes a determination in good faith that he cannot continue to
carry out his job in substantially the same manner as it was intended to be
carried out immediately before such diminution.  Notwithstanding
anything herein to the contrary, Constructive Termination shall not occur within
the meaning of this paragraph 11 until and unless 30 days have elapsed from the
date the Company receives such written notice without the Company curing or
causing to be cured the circumstance or circumstances described in this
paragraph 11 on the basis of which the declaration of Constructive Termination
is given.

         

        
          	
                  12

                	
                  ADVERSE CHANGE IN THE
  PLAN

                


        

         

        For purposes
of this plan, an “Adverse Change in the Plan” shall mean:

         

        
          	
                   
      

                	
                  12.1

                	
                  termination
      of the Plan pursuant to subparagraph
18(a);

                


        

         

        
          	
                   
      

                	
                  12.2

                	
                  amendment
      of the Plan pursuant to paragraph 17 that materially diminishes the value
      of PSU grants, either to individual Employees or in the aggregate, unless
      there is substituted concurrently authority to grant PSUs of comparable
      value to individual Employees in the Plan or in the aggregate, as the case
      may be; or,

                


        

         

         

        
          
            
            

          

          
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                  12.3

                	
                  in
      respect of any holder of a PSU a material diminution in his rights held
      under such PSU (except as may occur under the terms of the PSU as
      originally granted) unless there is substituted concurrently a PSU grant
      with a value at least comparable to the loss in value attributable to such
      diminution in rights.

                


        

         

        
          	
                  13

                	
                  HOSTILE TAKEOVER
  TERMINATION

                


        

         

        For purposes
of this plan, a “Hostile Takeover Termination” shall mean an Adverse Change in
the Plan as described in paragraph 12 or any termination (including, but not
limited to, a Termination Without Cause as described in paragraph 10 or a
Constructive Termination as described in paragraph 11) of an Employee’s
employment with the Company or a Subsidiary of the Company at any time following
a Change in Control of the Company, as described in paragraph 9, that was
opposed by the two Board members nominated by Haverford (Bermuda)
Ltd.

         

        
          	
                  14

                	
                  DILUTION AND OTHER
    ADJUSTMENTS

                


        

         

        
          	
                   
      

                	
                  14.1

                	
                  In the
      event of any change in the issued and outstanding Common Shares of the
      Company by reason of any share split, share dividend, recapitalization,
      merger, consolidation, reorganization, amalgamation, combination or
      exchange of Common Shares or other similar event, and if the Compensation
      Committee shall determine, in its sole discretion, that such change
      equitably requires an adjustment in the number or kind of Common Shares
      that may be issued pursuant to PSUs under the Plan pursuant to paragraph 6
      or in any measure of performance, then such adjustment shall be made by
      the Compensation Committee and shall be conclusive and binding for all
      purposes of the Plan.

                


        

         

        
          	
                   
      

                	
                  14.2

                	
                  Upon
      the declaration by the Board of Directors of the Company of a dividend in
      specie or in kind in favor of the holders of Common Shares in the Company,
      the Compensation Committee shall determine, in its sole discretion, if
      such dividend equitably requires an adjustment in the number or kind of
      PSUs that may be issued to an Employee under the Plan in lieu of a
      dividend payment.

                


        

         

        
          	
                  15

                	
                  DESIGNATION OF BENEFICIARY/INTER VIVOS DESIGNEE BY
      EMPLOYEE

                


        

         

        
          	
                   
      

                	
                  15.1

                	
                  An
      Employee may name in writing to the Compensation Committee, or such other
      person as the Compensation Committee may designate from time to time to
      receive such instructions, a beneficiary to receive any payment to which
      he may be entitled in respect of PSUs under the Plan in the event of his
      death.  An Employee may change his beneficiary from time to time
      in the same manner.  If no designated beneficiary is living on
      the date on which any amount becomes payable to an Employee's executors or
      administrators, the term “beneficiary” as used in the Plan shall include
      such person or persons.

                


        

         

        
          	
                   
      

                	
                  15.2

                	
                  An
      Employee may name in writing to the Compensation Committee, or such other
      person as the Compensation Committee may designate from time to time such
      instructions, one or more Inter Vivos Designees and successor Inter Vivos
      Designees who shall be given the rights to all past, present and future
      grants or series of PSUs or to one or more specific grants or series of
      PSUs.  An Employee may change the designation of any Inter Vivos
      Designee in the same manner and such designation shall revoke and
      supersede all earlier designations.  In the event an Employee
      does not notify the Compensation Committee designating one or more Inter
      Vivos Designees, or no Inter Vivos Designee survives the Employee, the
      PSUs and any payment of shares in place of cash shall be given to the
      Employee.

                


        

         

         

        
          
            
            

          

          
            Page 9 of
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                  16

                	
                  MISCELLANEOUS
  PROVISIONS

                


        

         

        
          	
                   
      

                	
                  16.1

                	
                  No
      employee or other person shall have any claim or right to receive a grant
      of PSUs under the Plan.  Neither the Plan nor any action taken
      hereunder shall be construed as giving an employee any right to be
      retained in the employ of the Company or any
  Subsidiary.

                


        

         

        
          	
                   
      

                	
                  16.2

                	
                  An
      Employee’s rights and interest under the Plan may not be assigned or
      transferred in whole or in part either directly or by operation of law or
      otherwise (except in the event of an Employee’s death), including but not
      limited to, execution, levy, garnishment, attachment, pledge, bankruptcy
      or in any other manner and no such right or interest of any Employee in
      the Plan shall be subject to any obligation or liability or such
      Employee.

                


        

         

        
          	
                   
      

                	
                  16.3

                	
                  No
      Common Shares shall be issued hereunder unless counsel for the Company
      shall be satisfied that such issuance will be in compliance with
      applicable laws and Bermuda law.

                


        

         

        
          	
                   
      

                	
                  16.4

                	
                  The
      Company and its subsidiaries shall have the right to deduct from any
      payment made under the Plan any taxes required by law to be withheld with
      respect to such payment.  It shall be a condition to the
      obligation of the Company to issue Common Shares upon payment of a PSU
      that the Employee pay to the Company, upon its demand, such amount as may
      be required by the Company for the purpose of satisfying any liability to
      withhold taxes.  If the amount requested is not paid, the
      Company may refuse to issue Common
Shares.

                


        

         

        
          	
                   
      

                	
                  16.5

                	
                  The
      Company reserves the right to withhold shares or deduct from the Employee
      payroll any taxes or social benefit costs to the Employee or the Company
      associated with the vesting or fulfillment of the
  PSUs.

                


        

         

        
          	
                   
      

                	
                  16.6

                	
                  The
      expenses of the Plan shall be borne by the Company.  However, if
      a grant of PSUs is made to an employee of a
  Subsidiary:

                


        

         

        
          	
                   
      

                	
                  16.6.1

                	
                  if
      such grant results in payment of cash to the Employee, such Subsidiary
      shall pay to the Company an amount equal to such cash payment;
      and

                


        

         

        
          	
                   
      

                	
                  16.6.2

                	
                  if the
      grant results in the issuance to the Employee of Common Shares, such
      Subsidiary shall pay to the Company an amount equal to fair market value
      thereof, as determined by the Compensation Committee, on the date such
      Common Shares are issued.

                


        

         

        
          	
                   
      

                	
                  16.7

                	
                  The
      Plan shall be unfunded.  The Company shall not be required to
      establish any special or separate fund or to make any other segregation of
      assets to assure any payment under the
Plan.

                


        

         

        
          	
                   
      

                	
                  16.8

                	
                  By
      accepting any grant or other benefit under the Plan, each Employee and
      each person claiming under or through him shall be conclusively deemed to
      have indicated his acceptance and ratification of, and consent to, any
      action taken under the Plan by the Company, the Board or the Compensation
      Committee.

                


        

         

         

        
          
            
            

          

          
            Page 10 of
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                  17

                	
                  AMENDMENT

                


        

         

        The Plan may
be amended at any time and from time to time by the Board in accordance with the
bye-laws of the Company, but no amendment which increases the aggregate number
of Common Shares which may be issued pursuant to the Plan or the class of
employees eligible to participate shall be effective unless and until the same
is approved by the shareholders of the Company.  For the avoidance of
doubt, any action taken by the Compensation Committee pursuant to paragraph 14
does not require shareholder approval.  No amendment of the Plan shall
adversely affect any right of any Employee with respect to any previous grant
without such Employee’s written consent.

         

        
          	
                  18

                	
                  TERMINATION

                


        

         

        This Plan
shall terminate upon the earlier of the following dates or events to
occur:

         

        
          	
                   
      

                	
                  18.1

                	
                  the
      adoption of a resolution of the Board terminating the Plan;
    or

                


        

         

        
          	
                   
      

                	
                  18.2

                	
                  ten
      years from the date the Plan is initially or subsequently approved and
      adopted by the shareholders of the Company in accordance with paragraph 18
      hereof.

                


        

         

        No
termination of the Plan shall alter or impair any of the rights or obligations
of any person, without his consent, under any previous grant under the
Plan.

         

        
          	
                  19

                	
                  SHAREHOLDER
  ADOPTION

                


        

         

        The Plan
shall be submitted to the shareholders of the Company for their approval or
adoption.  The Plan shall not be effective and no grant shall be made
hereunder unless and until the Plan has been so approved and adopted by the
shareholders in the manner required by the laws of Bermuda.

         

        
          	
                  20

                	
                  GOVERNING
LAW

                


        

         

        The Plan shall be governed by and
construed and interpreted in accordance with the laws of Bermuda.

         

        


        


        


        
          
            
            

          

          
            Page 11 of
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        Schedule of
Amendments

         

        


        
          	
                  Clause

                	 
      	
                  Amendment

                	 
      	
                  Approved

                
	 
      	 
      	 
      	 
      	 
      
	
                  Schedule
      of Amendments

                	 
      	
                  New
      Schedule of Amendments included

                	 
      	
                  Board
      of Directors meeting held on 7 April, 2006.

                
	 	 	 	 	 
	
                  Definition
      of “Performance Period(s)”

                	 
      	
                  Language
      added to clarify that any such period must end on December
    31.

                	 
      	
                  Board
      meeting held on 16 November, 2006.

                
	 	 	 	 	 
	
                  Clause
      2.8

                	 
      	
                  Definition
      of “Employee” changed to delete David Brown as an excluded
      party.

                	 
      	
                  Board
      of Directors meeting held on 7 April, 2006.

                
	 	 	 	 	 
	
                  Clause
      4.2

                	 
      	
                  Increase
      maximum number of  PSUs to 2.8 million and increase aggregate
      Maximum Awards to 5.6 million Common Shares.

                	 
      	
                  Board
      meeting held on 16 November, 2006.

                  Shareholders’
      meeting held on 16 November, 2006.

                
	 	 	 	 	 
	
                  Clause
      6.5

                	 
      	
                  Compensation
      Committee given the option to pay the Maximum Award either in cash or by
      issuance of Common Shares in the event of a Hostile Takeover
      Termination.  Cash value of Common Shares based on market value
      rather than net asset value as of the date of a Hostile Takeover
      Termination.

                	 
      	
                  Board
      of Directors meeting held on 16 November, 2006.

                
	 	 	 	 	 
	
                  Clause
      6.6

                	 
      	
                  Cash
      value of Common Shares based on market value rather than net asset value
      as of the date employee becomes entitled to payment.

                	 
      	
                  Board
      of Directors meeting held on 16 November,
2006.

                


        

         

         

        
          
            
            

          

          
            Page
12 of 13

            
              

            

          

          
            
            

          

        

         

         

         

        
          	 	 	 	 	 
	
                  Clause 17

                	 
      	
                  Language
      added to clarify that Compensation Committee action taken pursuant to
      Paragraph 14 does not require shareholder approval.

                	 
      	
                  Board
      of Directors meeting held on 16 November , 2006.

                
	 	 	 	 	 
	
                  Clause
      15

                	 
      	
                  Language
      added regarding notification procedure of beneficiary or Designee and
      ability for such designations retroactively effect prior PSU
      grants

                	 
      	
                  Board
      of Directors meeting held May 15, 2008

                
	 	 	 	 	 
	
                  Clause
      4.2

                	 
      	
                  Incorporation
      of increase in number of PSUs available for grant and Maximum Award
      available

                	 
      	
                  Shareholder’s
      meeting held May 16, 2008

                
	 	 	 	 	 
	
                  Clause
      16.4

                	 
      	
                  Incorporation
      of tax provisions

                	 
      	
                  Board
      of Directors meeting held May 15,
2008

                


        

        


        


         

        


        


         

        DOCUMENT  REVISION
HISTORY

         

        


        


        
          	
                  Version

                	
                  Date

                	
                  Summary
      of Changes

                	
                  Section

                	
                  Approved
      by

                
	
                  Amendment
      1

                	
                  7/4/06

                	
                  Conforming
      Amendments

                	
                  Various

                	
                  Board
      of Directors

                
	
                  Amendment
      2

                	
                  16/11/06

                	
                  Various
      technical changes

                	
                  Various

                	
                  Board
      of Directors

                
	
                  Amendment
      3

                	
                  16/11/06

                	
                  Amended
      & Restated

                	
                  Various

                	
                  Shareholders

                
	
                  Amendment
      4

                	
                  20/07/07

                	
                  Amended
      & Restated

                	
                  Various

                	
                  Board
      of Directors

                
	
                  Amendment
      5

                	
                  16/05/08

                	
                  Amended
      & Restated

                	
                  Various

                	
                  Board
      of Directors and Shareholders

                


        

        
 

         

         

         Page 13 of 13